SAP MM Business Process

SAP Materials Management (MM) helps to manage the procurement and inventory functions occurring
in day-to-day business operations.

This module contains many aspects such as purchasing, inventory management and physical inventory,
external service management, consumption-based planning, and logistics invoice verification.

MM is highly integrated with other modules such as FICO (Financial Accounting & Controlling), Sales &
Distribution (SD), Production Planning (PP), Plant Maintenance (PM), Customer Service, Project System
(PS), Warehouse Management (WM), Quality Management (QM), etc.

http://sapdocs.info/application-modules/mm-overview/sap-mm-integration-with-other-modules/
 Purchase
requisition can
Basics of External Procurement Process - p2p cycle
come from:
Follow up with FI
Sales &
dept for payment to
distribution.
vendor.
Production
planning.
Identify vendors.
Plant
Request for
maintenance.
quotation and
maintain Project Sytems.
quotations.
Finance
department.

Customer Service.

Compare PO and
Receive the
GR to inform FI
goods from
department for
vendor and Follow up Compare quotations and
payments.
provide to with vendor select the appropriate
concern vendor.
department

Create PO, contract, scheduling

agreement for the vendor.
Examples of some business scenarios.

MANUFACTURING PLANT WITH MAKE TO ORDER.

TRADING COMPANY.
MANUFACTURING PLANT WITH PLANT MAINTENANCE.

ADMIN OR PLANT MAINTENANCE.

In terms of customer service,

Customer logs into the website and details his problem with machine….this is called service notification.

Service notification is converted to Service order and a field engineer is assigned to go and do the repair.

Service engineer goes to the site and if there is a requirement for spare part, he reaches out to
procurement department.

Purchasing department does the following operations.

MM Business Processess.

SNO Business Process

1 Procurement of material for stock purpose
2 Procurement of material for direct consumption
3 Asset/Capital good procurement
4 Pipeline procurement
5 Consignment procurement
6 Subcontracting
7 Import procurement
8 Third party procurement
9 Outline agreements
a) Contracts
b) Schedule agreements
10 Stock Transfers
a) Intra-company
b) Inter-company
11 External Service Procurement
12 Returnable transport packaging material handling (RTP)
13 Non-stock material procurement
14 Non-valuated material procurement
15 Blanket purchasing
16 Rebate agreement